A few days ago, electronics distributors have published a report which shows that the VAT fraud in Poland is estimated up to 1.8 billion PLN ( 428 million Euro ) per year.

In the year 2012-2013 more than 240 Tax controls concerning trading of electronic devices took place and they detected around 714 million PLN ( 170 million Euro ) losses . Since the beginning of the year until mid- March there were 27 more consecutive procedures which disclosed fraud related to VAT of an excess of additional 102 million PLN ( 24 million Euro ) .

In most of this cases the owners of such companies are holders of British French or Dutch passports, but of different origins , and in most cases they were already involved in similar activities in Western Europe.

Representatives of Tax authorities admits that the VAT fraud in electronic trading is much better organized than it was before in trading of other goods. This chain of rotating smartphones involves not only small “players” which are acting as “missing traders” , but also medium sized companies and eventually major distributors.

A simplified flowchart of this procedure

1. Usually company registered in different EU country working as the “supplier” , selling high end models of smartphones to the importer

2. The second step is the polish importer which is usually a company with an owner of different origins , importing and selling locally the goods to the next company , charging the next company with 23% VAT , inland Revenue tax on domestic sales is not declared, this company usually has short life period.

3. Acquires the goods, and sells them further on to the next local company , or to a large distributor.

4. This procedure is repeated and the most companies involved the harder for the tax office to clear out the case.

5. Eventually the goods will be bought by a distributor ( consciously or not ) , who will export the goods, without charging the VAT and later on recover the input tax. In such cases the state is cheated twice.

Source : www.pb.pl